Pandemics + Social Inequality = China’s Economic Collapse?

China has always been seen by Western eyes as an economic threat-- an ever-growing power house of riches that needs to be stopped. On the other hand, the migrant worker stigma and social rights abuse that seep through the city streets of China may hint otherwise. During this time of COVID-19, as the global economy slips further, I was curious as to how Chinese migrant workers from rural areas are affected and if it would cause a domino effect on the fastest growing economy. Thus, I did some research on how SARS, along with the novel coronavirus, have affected the rural class--which led to some disturbing results and dark foreshadowing on long term economic growth. 

To find the answer, I looked at past instances of disease and hoped that history will have clues as to how a pandemic affects migrant workers, and in turn, the economy. SARS, severe acute respiratory syndrome, is an illness that was seen as a global threat in March of 2003. Between  November 2002 to July 2003, over 8,098 people internationally became sick and 774 died after being diagnosed with the illness. During times of chaos, inequalities between the rural and urban classes tend to increase, which could spell out negative implications for the economy and future economic growth. 

During SARS, migrant workers from rural areas became the focal group in anti-SARS campaigns. The municipal government of Beijing issued at least 18 official documents on migrants and SARS between late April and early June. Additionally, across the nation, the government issued at least 8 documents specifically on migrants during the same period. With stigma against migrants already a part of urban culture, these documents suggest how the migrants’ lack of hygiene, congested accommodations, and lack of knowledge for self-protection make them more susceptible to the disease. Their continued movement between cities and the countryside is another cause of concern. 

Rural migrants pose a special challenge to the state because of the government policies that were put in place, such as the hukou system. Migrant workers have minimal access to  health information with no medical insurance and lack of visitation to the hospitals, which the government sees as a threat to national security.During SARS, workers from rural areas were forced to go to hospitals, and until these patients were confirmed with the virus, they would have to pay all of the service fees.According to a news report, one particular worker was hospitalized in Beijing on the 30th of April due to fever that had settled in two days. However, partly due to classism and the social stigmas against migrants at that time in addition to high caution from the government, the patient was confined for another two weeks for further observation, making the bill total to RMB 5000.At that point, the migrant worker had to borrow money so he could be discharged since he had no way to repay his debt. Thus, the SARS pandemic has a way of feeding straight into the stereotypes of rural migrant workers being dirty, uneducated, and poor—which in turn generates more inequality through stereotyping as a positive feed-back loop.  

COVID-19 is a disease that emerged in Wuhan, China in December 2019 and is an ongoing pandemic stretching across the globe. In China, there are a total of 82,874 cases and 4,633 deaths. How this pandemic has affected the Chinese economy similarly to how SARS had previously ravaged the country: decreasing consumer spending, investments, and industrial production. Compared to SARS, COVID-19 has a much higher negative impact on China’s economy, which leads me to believe that it will also rock the rural and urban inequality more than we have seen before.  

There is no doubt that the same marginalization and hostile attitude towards migrant workers have increased similarly to how it increased during the period of SARS. If we refer to the maps below, we can see that it seems that most of the COVID-19 cases are worse in the  hometowns of migrant workers--a fact that pushes migrant workers into the spotlight in regards to anti-COVID-19 campaigns. 

Nevertheless, there are differences between SARS and COVID-19 regarding how migrant worker stigma generates inequality and how big of an effect this inequality will have on the Chinese economy. Compared to the time period of SARS, the rural citizens of China today are much more cognizant of the opportunity costs that occur when they leave their home provinces—lack of socioeconomic support, increased classism, and the possibility of missing out on the economic boom within their own rural towns. This combined with the exhaustion of miracle growth factors has a really good chance of further hampering the Chinese economy. During the SARS outbreak, the migrant workers, or mingong, were young and didn’t mind taking risks and labor intensive jobs in the cities with little pay and, thus,  the stigma, lack of rights and resources did not faze them. However, in today’s time, as China’s population grows older and urbanization continues in rural areas, the need and desire to work in back-breaking labor in the big cities becomes less attractive to younger populations in the countryside. The demographic dividend, a factor of growth for China, is shrinking at a faster pace because of the decrease in the stream of young workers entering the “cheap labor” force in urban China.  

Finally, it is no surprise that the sectors of work that are most affected by COVID19 are similar to those affected during SARS—manufacturing, household services, hotel and catering, transport and logistics, and sales industries. As we can see from the pie chart above, migrants are mostly employed within these sectors. Now, as the COVID-19 lockdown continues, we see layoffs in these sectors and an increased stigma from the urban residents against rural migrants within the bigger, more urbanized cities. 

We may one day witness a world where migrant workers believe the opportunity costs of migrating to a city to work as cheap labor are higher than the benefits that are received. Additionally, we may observe urban employers hiring the “cleaner,” “more-educated,” and “better-off” local workforce to fill in job openings that were previously taken by the displaced and laid-off rural migrant workers after the pandemic ceases. The aftermath of it may be the drastic drop and even disappearance of the demographic dividend that has brought China its miracle boom. Will China be able to achieve the growth and prosperity that it once acclaimed with its cheaper migrant labor gone? Can the world adjust its supply chains in time before China’s “factory of the world” title is no longer relevant? Only time will tell.

References:

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2.  “SARS.” Centers for Disease Control and Prevention. Centers for Disease Control and Prevention, May 3, 2005. https://www.cdc.gov/sars/about/faq.html.

3. Biao, Xiang. “SARS and Migrant Workers in China: An Institutional Analysis.” Asian and Pacific Migration Journal 12, no. 4 (2003): 467–99. https://doi.org/10.1177/011719680301200403.

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9. Biao, Xiang. “SARS and Migrant Workers in China: An Institutional Analysis.” Asian and Pacific Migration Journal 12, no. 4 (2003): 467–99. https://doi.org/10.1177/011719680301200403.

10.   “Coronavirus Disease (COVID-19) - Events as They Happen.” World Health Organization. World Health Organization. Accessed May 1, 2020. https://www.who.int/emergencies/diseases/novel-coronavirus-2019/events-as-they-happen.

11. “China.” Worldometer. Accessed May 1, 2020. https://www.worldometers.info/coronavirus/country/china/.

12.  National Bureau of Statistics of China >> Annual Data. Accessed May 11, 2020. http://www.stats.gov.cn/english/Statisticaldata/AnnualData/.

13. China's Migrant Workforce – A Special Report. Accessed May 1, 2020.  https://www.samsays.com/SIP-CBA1.htm.

14.  “Migrant Workers and Their Children.” China Labour Bulletin, March 10, 2020. https://clb.org.hk/content/migrant-workers-and-their-children.